EFFORT PROPERLY DIRECTED 



8 




AU:XANDER 
HAMILTON 
INSTITUTE 



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H.122 



1 



Effort Properly 
Directed 



Number Eight of a Series of Talks Especially 
Prepared for the Alexander Hamilton Institute 



ALEXANDER HAMILTON INSTITUTE 
ASTOR PLACE, NEW YORK CITY, U. S. A. 

Copyright, 1914, by Alexander Hamilton Institute 



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^31 



READING ASSIGNMENT 

NUMBER EIGHT 

''It is time that some of the energy of 
investigations he turned upon the ques- 
tion of labor adjustment — the more econom- 
ical use of human power. Consider the 
efforts of our schools^ colleges and private 
laboratories to solve questions pertaining 
to mechanical and electrical engineering; 
the struggle to produce mechanical refine- 
ments and power-saving appliances; the 
tests of coal, oil and other fuels; the gauges 
for measuring the use of power — and then 
consider the small amount of effort used in 
investigating the use and conservation of 

labor power 1^^ — Page 342, Chapter VIII, Part II, 
Volume II of the Modern Business Text. 



(i) Read the talk in this pamphlet on ''Effort 
Properly Directed." A vast amount of time and money 
is wasted through ill-directed effort. This talk indi- 
cates some of the means used to prevent such waste. 

(2) Read Chapters VIII-XII in Part II (Pages 
340 to 464 inclusive) of ''Organization and Manage- 
ment,** which is the second volume of the Modern 
Business Text. 

(3) Solve the accompanying problem and return the 
solution to us for criticism. 

The business world is looking for men who not only are masters of their 
own jobs but who also can direct the work of others. The man who 
knows how to do the right thing in the right way and at the right time is 
in line for promotion to a position of larger responsibilities, greater 
authority and increased earnings. 



<art ■M.4krS.7«a. 



Effort Properly Directed 

''The most significant factor in the de- 
velopment of the American nation, whether 
we look at it from the political, religious , 
social or economic side, is the high cost of 

man power. ^^ — Pages 340, 341, Volume II of the 
Modern Business Text. 

"Not now/' said Elias Howe's wife, when her 
husband asked her to come and look at the sewing 
machine he had just invented. "Not now, I am too 
busy with my needle, making a dress!" 

No doubt you have often wondered as you stood 
watching the lightning speed of an expert sewing 
machine operator, how our women folk got along in 
the days before Howe's genius gave them the machine- 
propelled needle. Yet it is very probable that 
the seamstresses of those days looked upon Howe's 
invention as a destroyer of their business. Why, every 
woman would now make her own dresses and seam- 
stresses would have to hunt other employment! 

Such, at any rate, has been the reception given to 
many, if not most labor-saving inventions by the 
workers whom these inventions replaced. 

Fighting a Friend 

It is not such a very long time since the printing 
press first made its appearance. That did away, of 
course, with the slow hand-press upon which the 
world's printing had been done, just as it multiplied 
the daily output by thousands. But the pressmen 



did not like the innovation, for now one man could do 
the work of ten or more ; so they fought it tooth and 
nail. What was to become of them if power presses 
were installed? And were they now to stand idly by 
while the bread was being taken out of their mouths 
and out of the mouths of their wives and children? 
No, surely not. So they rose up in their might to 
drive out by sheer force this device of the devil. That 
they failed to do so was not their fault. Yet today, 
as everyone knows, and in spite of the fact that modern 
automatic presses have made the early power press 
look like a mere toy — so crude was it and incomplete — 
not only is a vastly greater number of men employed 
in the printing business, but their wages are much 
higher, their hours shorter, while their wives and 
children enjoy comforts that were scarcely dreamed of 
in those days. 

The fact is, as Mr. Galloway explains in Chapter 
VIII of our assignment, that a growing civilization 
imperatively demands that more and more of the 
world's work be done by machine power. It is neces- 
sary that man power be reserved in increasing meastu*e 
for such work as calls for the application of thought — 
work which for that reason also affords greater com- 
pensation. So, although workmen may grtimble when 
they find a machine coming along that does the work 
of a dozen "hands," the fact is, they are just being 
helped, even though unwilling, to fill places of a higher 
order than those they lost. It is a blessing in disguise. 

Fitting the Man to the Job 

But the chief problem with which the industrial 
world today is wrestling, is not so much how to replace 
man power with mechanical power, as how most 

4 



effectively to apply human power to the control of 
machinery and to the execution of individual tasks. 
There are too many square pegs in round holes — 
misfits who, for their own .good and for the good of 
industry, need to be put where they properly belong. 
Others, and there are many of them, must be made 
more efficient where they are, must be shown how to 
fit themselves for larger earnings. 

It is to this problem that efficiency engineers such 
as Taylor, Gantt, Emerson and others of late years have 
given so much time and attention. And the results 
achieved through their efforts have in many cases 
been most remarkable. 

Where Labor is Made a Science 

Some of the commonest of tasks, requiring little 
more than brute strength for their performance, have, 
on being submitted to scientific tests, been found 
decidedly wanting with regard to the degree of effi- 
ciency with which they were carried out. Such a 
simple task as picking up a bttrden, carrying it a dis- 
tance, and putting it down again — and the process 
continually repeated dining a number of hours per 
day — ^would not, we might think, afford much scope 
for the efficiency man unless he could drive the men to 
a faster gait, or add to the nximber of pounds they were 
carrying at a time. If you have ever stood watching 
a gang of men employed at such work, you will have 
noticed that they pass and repass at a certain uniform 
gait, which nothing short of a lightning stroke could 
alter. Yet it has been demonstrated again and again 
that by a proper adjustment of the periods devoted to 
work and rest, and by the selection of workers naturally 



adapted to the particular task, the result of a day's 
labor could be doubled, trebled and even quadrupled. 
And if such results are obtainable in the field of 
ordinary labor, what may not the result be when 
principles of efficiency shall have been applied more 
generally to the more complex tasks of store and office? 
The fact is that we are just beginning to learn what 
prodigals most of us have been with our time, and how 
unsystematic in the performance of our work. 

There is in practically all trades an 
enormous difference between the amount of 
work actually accomplished and that which 
may be accomplished under proper con- 
ditions and with intelligent supervision. 

Putting Principles to Test 

That the average efficiency percentage in oiu: shops, 
factories and offices is alarmingly low, is the unanimous 
verdict of competent authorities. Such a thing as lOO 
per cent, efficiency does not in fact exist. A mammoth 
manufacturing corporation, noted for its high standard 
of efficiency and managed by experts in every de- 
partment, is said to have reached an efficiency per- 
centage of only a little over 80 per cent. It is not 
difficult, therefore, to believe the statement that the 
average efficiency in manufacturing plants is consider- 
ably less than 50 per cent. 

Years ago a machine mantifacturing company sent 
for Mr. Taylor to know if he thought his principles of 
scientific management would be of any use to them. 
They were told that their output could be doubled 
without increasing the present working force and 
machinery. This astounding statement, the superin- 

6 



tendent indignantly characterized as the merest rub- 
bish — simply a piece of impudent boasting, he said. 
Well, Mr. Taylor put it to him this way: "You select 
any of your machines which you consider represents 
the average work of your shop and we shall prove to 
you that our claim is fully justified." 

So a machine was selected that for years had been 
run by a first-class mechanic, and careful records were 
made of the actual time constmied in finishing the 
special parts that were turned out. Then experiments 
began. The pulling power and feeding capacity of the 
lathe were ascertained, coimter shafts and driving 
pulleys were arranged so as to instire running at proper 
speed. A study of the composition of the metal and of 
the shape and position of the cutting tools, etc., was 
made — no item being overlooked that had any bearing 
whatever upon the time question. When the experi- 
ments were completed and the workman duly in- 
structed, it was found that the gain in speed was from 
2^ times in the slowest instance to nine times in the 
highest! And this, remember, was a plant where 
specialization had been highly developed and where 
efficiency was considerably above the average. 

Helping their Men to Elarn More 

A careftil reading of Mr. Galloway's text will demon- 
strate conclusively that notwithstanding the claim of 
the demagogue to the contrary, the intelligent factory 
manager of the present time is studying hard how to 
make his workmen earn more money. Not always, 
however, are the manager's efforts in this direction 
welcomed by the men. Frequently a great deal of 
tact and patience on his part is required before the 

7 



men can be made to see that they will be benefited by 
the proposed changes. Only a few years ago, one 
of the largest manuf actiiring concerns in the coimtry 
endeavored to introduce some of the scientific manage- 
ment principles. The plan, when put into operation, 
would enable the workmen to earn considerably more 
in wages, even as it would increase considerably the out- 
put of the plant. But the men resisted the innovation: 
as an infringement of their rights and a disgraceful 
quarrel followed which eventually bred a strike that 
lasted over one full year. Eventually, however, 
another manager, by the use of more tactful methods 
succeeded in introducing one by one the very reforms, 
which his predecessor had proposed and which the men 
had so stmimarily rejected. 

One lesson now being learned by em- 
ployers of labor is that the first step in the 
direction of increased efficiency and im- 
proved working conditions consists in win-' 
ning the workman's confidence. 

The Story of a Southern Enterprise 

About two years ago the owner of a machine and 
tool works in a Southern city was looking for help on 
a problem that just then was troubling him. His 
working force consisted of about sixty men who were 
paid fixed weekly wages. He felt sure the shop was 
not turning out its full capacity of work, and he was 
studying hard to find a way to increase the output. 
In writing to a friend in a Northern city whose experi- 
ence was wider than his own, the Southerner said: 

"I think I have, everything considered, a pretty good 
lot of men, but we are behind with our orders, and our 

8 



machines are full. I have tried various ways of speed- 
ing up the work, but with no satisfactory restdt. I felt 
sure that a piece work or bonus plan would enable our 
men to earn more, and I had such a plan prepared. I 
had figured out that this plan would give the men an 
opportunity to earn from 15 to 35 per cent more than 
they are earning at present. But when I called the men 
together to explain my plan to them, I was surprised to 
find that they did not care for the change at all. Possi- 
bly they considered it a scheme to reduce their wages. 
"If you can suggest a way to get the men interested 
in the piece work or bonus plan, I should be very glad 
to know it." 

The answer he received from his friend told him 
that the only thing for him to do was to create con- 
ditions in the shop that would make the men volun- 
tarily ask for such a payment plan as he had suggested. 
To this end, he was advised to begin a systematic 
adjustment of operations in the shop so as to have 
every man do the work for which by nature and train- 
ing he was best fitted, and to endeavor to eliminate 
all waste of time. 

It was further suggested that he bring into the shop 
a few extra good mechanics to act as instructors of 
the men in some special work wherein they had insuffi- 
cient experience. This would necessarily increase the 
output of the shop and the hope was held out that if 
these suggestions were carried out, it would not be long 
before the men of their own choice would ask to have a 
piece work plan put into operation. 

A Fresh Difficulty 

Two months later another letter came from the 
Southern correspondent. It appeared he had followed 
his friend's suggestions to the letter, had secured two 



expert workmen from Cincinnati whom he paid double 
wages for teaching his men, and that he himself with 
his two foremen had effected some changes along the 
lines suggested. 

"Already our output is increased," he wrote, "and 
I have information that the men are talking piece work 
among themselves in the shop, but it seems that now 
I have struck a new snag. It seems that my two fore- 
men are persistently discouraging the piece work idea 
among the men, and that they are actually keeping 
some of the men from doing their best. As I size up the 
situation, these foremen are afraid that the proposed 
change, if adopted, will reflect unfavorably upon their 
management of the shop in the past. You will probably 
tell me to discharge these foremen and engage others, 
but both the nature of our work and the location of our 
business make that by no means an easy matter. 

"What I want to know is: 

"i. How can I, under the circumstances, make the 
foremen take kindly to the piece work system and 
actually assist the men in earning the biggest possible 
wage? 

"2. If you think it wise to offer the. foremen a 
bonus; on what basis should bonus be figured?" 

The inquirer was told that the payment of a bonus 
to foremen under such circumstances was known to be 
working very satisfactorily in similar cases. An equit- 
able basis of figuring such bonus was also suggested. 

Conflicting Interests 

After this, the Northerner heard nothing from his 
Southern friend for about six months. Then one day 
a letter came which again brought the case to his 
attention. This time the writer related how upon the 
receipt of the former letter he had discussed the situa- 

10 



tion with his foremen and outlined the bonus plan by 
which they were to share in the benefit of a larger 
output based upon the amount of bonus earned by the 
shopmen in case the new payment plan was introduced. 

"In less than one week," the letter ran, "a com- 
mittee called on me to say that the shop to a man were 
willing to adopt the plan I had outlined to them 
nearly nine months ago." 

The change had been made, he went on to tell, and 
as a restdt the output within the first month had in- 
creased nearly 30 per cent. Some of the men had 
increased their earnings from $3 per day to $4.50, and 
there had been general satisfaction all around. But 
lately, he said, trouble had been brewing in the shop 
and he now was afraid that he would soon be facing a 
strike unless a remedy could be found. The rest of 
his letter — ^too lengthy to be reproduced here — ^went 
to show that the foremen had begun to discharge the 
men who were not earning a large enough bonus, and 
substituting new men whenever they could find them. 
In this way some of the steadiest and most reliable 
workmen in the shop had been laid off, and the other 
men were getting restless. Yet it did not seem, under 
the existing arrangement, fair to the foremen to de- 
prive them of the right to ''hire and fire." 

Well, the case was really quite simple. The foremen 
had to be brought around to a point where their self- 
interests neither conflicted with those of the men, 
nor with those of the management. The Southerner 
was told to issue instructions that whenever a 
workman fell below the standard output assigned to his 
machine the foreman would have the shortage de- 
ducted from his bonus, and that the man should not be 
■discharged for such cause, without the consent of the 

II 



management. The result, it was predicted, would be 
that the foremen would take time to coach the work- 
man, so as to bring his work up to standard. 

Last stimmer the manufacturer came North on busi- 
ness and took occasion to call on his friend and adviser 
to express his appreciation of the help received. Con- 
ditions in his shop he said, were all that could be 
desired — the men were contented, and the output had 
been greatly increased. 



Truly, a wonderful work this — to im- 
prove the efficiency of the worker! YeSj 
and a noble one as well! If he is a bene- 
factor who makes two blades of grass grow 
where one grew before, he is surely one also 
who teaches the laborer how to earn two 
dollars where formerly he earned but one. 



A C 



ommon 



Er 



ror 



In Chapter IX of our assignment Mr. Galloway 
presents an interesting summary of the common 
factors that exert an influence upon the management's 
control of labor. These are necessarily of a greatly 
diversified nattire, and must be understood by all who 
would successfully direct the efforts of subordinates. 
It matters little what the particular character of the 
work may be; the principles apply with equal force 
to shop and office, to the gang in a planing mill as well 
as to a sales force or an accounting department staff. 

Harrington Emerson, the well-known efficiency en- 
gineer, tells of a case where two typewriter girls were 
employed at the same task. One of them, who had 
three years' experience, was paid $12.00 per week, the 
other, a new girl, was paid $7.00 per week. On inves- 



12 



tigation it was found that the $12.00 girl was able to 
direct less than four hundred cards per day, while the 
$7.00 girl easily directed eighteen hundred. 

The $7.00 girl could, at a single glance, see and re- 
member all the items on the card she was copying. 
The $12.00 a week girl had to read the copy word 
by word and item by item. She could, however, 
have written an excellent original letter as to the 
facts on each card. A readjustment was made which 
gave one girl a salary in keeping with her performance 
and the other work for which she was naturally 
adapted. Both employer and girls have benefited 
by this adjustment. 

The Welfare Idea 

A third way in which workers are helped to earn 
more and to do better work, is that which Mr. Gallo- 
way describes for us in Chapter IX under the head of 
Welfare Work. The idea that sanitary and cheerful 
surroundings have anything to do with the quantity 
and quality of work turned out, did not always im- 
press itself upon employers of labor. It is otherwise 
now. Thousands upon thousands of dollars are an- 
nually expended by leading manufacturers on what is 
known as Welfare Work. From the supply of ordinary 
washing and toilet facilities to the furnishing of porce- 
lain shower baths, comfortably furnished dressing 
rooms, well stocked libraries, dainty lunch rooms, etc., 
evidence is multiplying that plant owners recognize 
the wisdom of investing in such things. 

The National Cash Register Company is a ten- 
million-doUar corporation and no one is predicting its 
early dissolution. Yet some years ago this concern 
was in danger of going to the wall. The product 

13 




wasn*t up to standard. Machines by the htindreds 
were returned. They weren't acoirate; and a cash 
register that isn't accurate isn't worth a great deal. 

So the company set to work to get back of the faulty 
register; back of the men who made them; back to the 
conditions that made it possible for the workmen to 
produce, and for the inspectors to pass, faulty machines. 
When conditions had been sifted the company went in 
for welfare work with a vengeance. The management 
had learned a lesson. 

This is the definition of welfare work which the 
National Cash Register Company evolved from its 
research and study: 

"Capital, labor and management working together 
for the interest of all." So with that concern welfare 
work has never passed as philanthropy or charity. It 
is business pure and simple. The company has ten 
thousand employees and spends daily about 6 cents for 
each in maintenance of its welfare work. There is 
little doubt that this small amount is retiu*ned many 
times over. Mr. Galloway refers to a number of 
modem concerns where welfare work has a prominent 
place, and describes the various directions which such 
efforts have taken. Not to know what these are is to 
deny oneself the benefit of lessons learned through long 
and often very expensive experience. 

Efficiency Thermometers 

The Burroughs Adding Machine Company has 
brought the subject of efficiency to a fine point in the 
conduct of the typing room of its mail order depart- 
ment. The company, according to Mr. J. William 
Schulze, author of ''The American Office," is making 

14 



a successful appeal to the love of contest which com- 
monly inheres in human beings. Upon a large black- 
board on the end wall of the typing room is recorded 
the work of each typist in a manner resembling the 
mercury column of a thermometer. From her seat 
the typist can watch the column going higher and 
higher as her day's work is added to that of yesterday 
and the day before. Not only that, but she can see 
also, whether Miss Smith at the right, or Miss Brown 
at the left, is climbing more rapidly than she. And 
as her nimble fingers tap the keyboard before her, she 
knows that not only will her good work show up well 
in comparison with that of the other girls, but that 
there is a substantial bonus awaiting her as soon as her 
week's work has reached and passed the quota assigned 
her. It adds zest to the work, and turns moments 
that would otherwise be fritted away into dollars and 
cents in her pay envelope. Perhaps, too, she covets 
to be at the head of the class? Well, there is a "Blue 
Ribbon" waiting for her if she has merited such dis- 
tinction. And so the work goes on. A friendly rivalry 
spurring on the clicking of the keys under expert 
fingers. And the result? An increase of nearly fifty 
per cent was noted within the first four months after 
the blackboard had been introduced. So it is proving 
profitable both to the operators and to their employers. 
It is a distinct case of applied sound principles of man- 
agement. 

Zigzagging Checks 

The Alexander Hamilton Institute is constantly 
learning of cases where young men who are studying 
its reading course are finding opporttmities to put to 

15 



I 



good use some of the valuable material contained in 
the Texts and Lectures. Recently Mr. P. who is a 
clerk in the Transit Department of a bank in the 
Middle West and who enrolled about eighteen months 
ago, was made to feel that his diligence in studying the 
course was duly rewarded when he drew from the 
President of the bank the following remark: "You 
have done in three months, Mr. P., what we have 
been trying to do for years." 

Particularly pleasing was this bit of appreciation 
in that it was accompanied by a substantial increase 
in salary. 

Yet if you should ask Mr. P. he would tell you that 
it wasn't such a great thing after all. Almost any man 
similarly situated would have done the same thing. 
That is, if he had used a little common sense. Still, 
for all that, the matter was big enough to clog the 
wheels of their transit department and important 
enough to worry its chief considerably. Now it is 
in the transit department that all the checks which 
pass through the bank are handled. Here they are 
recorded and stamped, their figures verified, etc. But 
the work in this instance had become too bulky for 
the available force, and there was . considerable com- 
plaint on accoimt of the long hours. So the chief of 
the department was about to call upon the president 
and ask that an extra clerk be put on. At his own 
request, however, Mr. P. was first given a chance to 
rearrange the work of the department. He was given 
a free hand and told to go ahead. 

"I found the checks zigzagging back and forth 
across the office," he said, **and each clerk was doing 
his own work pretty much in his own way. There 
wasn't really any idea of inteUigent co-operation. But 

l6 



that's the way the work had been done for years, and it 
evidently didn't occur to any one that it could be done 
differently. It probably wouldn't have occurred to 
me either, if I had not read Modern Business." 

So our friend began to cut out useless motion. He 
rearranged desks and tables, so that the checks might 
be routed from man to man without any clerk having 
to leave his own desk. Instead of every clerk stamp- 
ing the endorsement of the bank on the backs of his 
own checks, all stamping was now left to one clerk who, 
with a long line of checks laid out before him, could go 
rapidly over them at a great saving of time. 

The result of it all is that the old force, as reorganized 
by Mr. P., handles the business without any trouble, 
and has time to spare for the additional business that 
is steadily coming to the bank. 

There is a ''Transit Department'' prob- 
lem in every business. There are men 
above and about you who have the ability 
but not the knowledge of principles you 
have, to tackle it. Your Course with the 
Institute should be carrying you steadily 
toward the manager's chair. 

Graphs in Management 

In Chapter X of our assignment Mr. Galloway 
emphasizes the value of statistics and the convenience 
of graphs as a source and means of determining future 
action. It is extremely interesting to read how con- 
cerns of world-wide importance study efficiency in 
shop and office by means of carefully prepared graphs 
and reports. Much of the inefficiency with which in- 
dustrial plants are charged may be traced to their 

17 



lack of such statistical material, instantly available and 
easily tmderstood. 

There is in New York City a corporation whose 
president will not now look at any records unless they 
are in the form of graphs. Years ago his organization 
sustained heavy losses during a protracted period, and 
when eventually the leaks were found, the president 
decided that henceforth he would have a system of 
records to make such a recurrence impossible. 

Accordingly, he demands from the accounting de- 
partment each month a graph headed ''Gross Oper- 
ating Income,'* which shows in comparison with the 
preceding twelve months, what the total income diuing 
the present month has been. Similar graphs are also 
prepared to show "Gross Operating Expense" and 
"Total Net Profits." Others are prepared to show the 
amount of income, expense, and profits according to 
three territorial divisions. 

Now when the president gets these charts, he esti- 
mates what, in the light of previous records and present 
prospects, the coming month's income, expense and 
profit ought to be. Whenever his graph of gross 
operating income shows the current month's income to 
have been below the standard he set at the beginning, 
the president goes to his territorial graph to locate 
the reason. Thereupon he is likely to dictate a letter 
to one of the district managers, offering some con- 
structive criticism and suggesting what steps should be 
taken to bring the amount up to standard. Or, if 
the trouble cannot so readily be located, and remedied, 
the president will jump right into the district that 
shows a loss of business and in co-operation with 
the district manager endeavor to bring the territory 
up to standard. 

i8 



If the monthly standard appropriation for expenses 
has been exceeded, the graph brings the matter in- 
stantly to the President's attention. An investigation 
follows and proper remedies are decided upon. Ever 
since this system was organized the concern has 
made rapid and uniform progress. 

"You see we are simply trying to avoid being found 
in the plight of the man who locked his stable door 
only after his horse had been stolen. When you wait 
to learn from your annual balance sheet whether or not 
you have made any profits, you are den3ring yotirself 
the opportunity of locking the door in case your profits 
are escaping. My monthly graphs keep me posted 
on the trend of things and I can step in quickly when 
necessary, to impose a check." 

''Ex-President Br own ^ of the New York 
Central, once told the New England Railway 
Club how a simple use of graphic charts 
saved the road $2,000,000 J" 

The remaining two chapters of our assignment are 
devoted by Mr. Galloway to various time-saving 
features adopted in modem organizations, and to the 
study of avoiding waste in the use of materials. Also 
to a consideration of modem ofiice methods based 
upon well-established principles of efficiency. 

These chapters are of great practical usefulness to 
the student of business efficiency. They have been 
evolved from the ideas and experiments, the success 
and failures of thousands of individuals and organi- 
zations. 

Moreover, the subject has an individual application 
from which we should not try to escape. Are we using 

19 



our time most economically? Are we planning our 
work — of whatever nature — ^in such a way as to ac- 
complish the most in the shortest time and with the 
least effort? 

This assignment, if it does nothing more, will con- 
vince you of the truth of the following statement 
attributed to Mr. F. W. Taylor: 

" That the first-class man can do in most 
cases from two to four times as much as is 
done on an average, is known to hut few and 
is fully realized hy those only who have 
made a thorough and scientific study of 
the possibilities of men.'' 

It is surely time for every man in business, young 
or old, executive or clerk — to analyze himself and his 
work. There is much of the useless to eliminate. 



I 



20 



1 



